The UK Government to Reduce Green Levies and Subsidies

The “Green” levies and subsidies which have been credited with the rise of using energy saving materials and devices for homes in the UK are now being called into question by Prime Minister David Cameron. The intention of the Prime Minister appears to be that his government will conduct reviews and reduce support for such green energy measures.

The motivations for the move is to save on consumer’s energy bills according to the Prime Minister. “I want more companies. I want better regulation. I want better deals for consumers. But yes, we also need to roll back the green charges that he (Ed Milliband) put in place as energy secretary,” said Cameron.

Of course, a senior Liberal Democrat source has voiced opposition, having been quoted by the BBC to the move as being “a panicky u-turn”.

While the advantages of these green levies and subsidies have been apparent since the measures were enacted, which include new solar panels and solar energy sources for the home, new insulation and the like, it is also true that roughly 9% of the average fuel bill per month is comprised of the environmental obligations and green deal schemes and subsidies for every household.

David_CameronPredictably, the split has been along party lines with many citing the increased taxation on citizens over these green measures while those that want to keep them in place cite the benefits that they generate. By December of this year, more facts will be known about this review and recommendations about the green levies and subsidies that are currently in place.

One aspect of these green levies that is coming under scrutiny is the effect they have on carbon taxation. How Cameron presents his new policies may be key to whether they are passed within parliament and the type of opposition that they will face. With many low carbon sources such as nuclear power and shale gas still several years away from fully coming on-line, renewable energy sources such as those generated by solar photovoltaic sources are one of the few low carbon options that are currently available.

Opponents to Cameron’s plans also point out that the focus on renewable only makes up roughly 3% of the average increase in utility bills. In fact, they cite the rising cost of gas over the past few years as being the primary source of the increase in which renewable energy sources may actually help households become less dependent.

Furthermore, the future of the energy market will certainly depend in larger part on renewable energy sources, so making investments now can save in the long run according to opponents of Cameron’s plans. Creating skilled jobs in green energy, developing new types of industry, adding stability to the energy market and bringing back areas in decline by creating new green resources may provide the long-term plan to preserve the climate and improve the overall economic status in the UK.

Of course, all of this will depend on the Prime Minister’s actual plan, in which the first details are being scheduled for release in December, 2013.